Facebook buys AOL patents from Microsoft for $550 mn

25 Apr 2012

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The world's largest social networking company Facebook Inc agreed to pay $550 million in cash to software giant Microsoft Corporation for acquiring hundreds of AOL patents to further beef up its intellectual property portfolio for defence against lawsuits.

The action has come at a time when Facebook's planned initial public offering - the largest ever internet IPO from the Silicon Valley - is just weeks away and the company is entangled in a patent-related lawsuit with internet giant Yahoo Inc.

Under the terms of the agreement, Facebook will obtain ownership of approximately 650 AOL patents and patent applications, plus a license to the AOL patents and applications that Microsoft will purchase and own.

Earlier this month, Microsoft bought around 925 AOL patents and patent applications plus a license to AOL's remaining portfolio, which contains approximately 300 additional patents covering a wide spectrum of technology by paying over $1 billion.

Facebook's general counsel Ted Ullyot said, ''This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term.''

Microsoft's executive vice president and general counsel Brad Smith said that the Facebook deal enables the company to recoup half of its costs while achieving its goals from the AOL auction.

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